KiwiSaver

ASB is closing down its KiwiSaver scheme set up for advisers and is currently considering its future options for the product.

It says that, as part of a review of its KiwiSaver schemes, it will no longer be accepting applications to join the FirstChoice KiwiSaver.

First Choice differs from the ASB KiwiSaver scheme as it has actively managed funds and was setup for advisers and as a distribution option for Sovereign. The ASB scheme uses index funds and is sold through the bank distribution network.

Currently First Choice has around 15,000 members and $200 million of funds under management while the ASB scheme has 370,000 members and more than $2 billion.

ASB’s Executive General Manager Wealth and Insurance Blair Turnbull says the reasons behind the change are largely to do with economics. He says some of the funds within First Choice, including the Sustainability fund which invests in former US vice president Al Gore’s company, have small amounts of funds under management.

Although First Choice has active funds there is a skew towards conservative, cash and balanced funds in the scheme.

He says that ASB GI, the manager of both FirstChoice and the ASB KiwiSaver Scheme, is considering its options for FirstChoice, including the possibility of transferring members to an alternative scheme.

ASB is continuing to develop its flagship scheme which includes adding some actively manage fund options “in the not too distant future.”

KiwiSaver provider Fidelity Life has teamed up with giant global investment manager Dimensional to launch two new funds.

Fidelity Life is launching the Asset Class Conservative Kiwi Fund and the Asset Class Growth Kiwi Fund, which will both have DFA Australia (Dimensional) as their primary fund manager.

Dimensional manages more than US$270 billion in assets globally.

It has close links with leading academics in the field of modern finance, including Gene Fama and Ken French and Nobel Laureates Merton Miller, Myron Scholes and Bob Merton.

Normally, access to investing with Dimensional in New Zealand is restricted to a select number of accredited financial advisers and institutions; however, the Fidelity KiwiSaver Scheme now allows KiwiSaver members the opportunity to utilise the Dimensional investment approach.

Further details about the funds and Fidelity’s deal with Dimensional will be provided at a briefing today.

KiwiSaver members will be offered the chance to invest in hedge funds by a new player in the market, Generate KiwiSaver.

It registered its prospectus on Friday.

Generate KiwiSaver is run by Generate Investment Management,  headed up by former Huljich Wealth Management investment manager Henry Tongue. Directors include Warren Couillault, formerly of Fisher Funds.

The scheme will invest in 10 to 15 fund managers globally,who are focussed on making money in up and down markets. Some would be hedge funds.

The scheme’s fees will be higher because of the cost of using other fund managers.  The scheme will offer conservative, growth and focused growth options.

AMP has announced plans to transfer its AXA KiwiSaver customers to the AMP KiwiSaver Scheme as it moves toward having a single scheme.

Under the terms of the proposed transfer, which has to be approved by the Financial Markets Authority, all existing AXA KiwiSaver Scheme customers will be transferred to an “enhanced” AMP KiwiSaver Scheme.

It is expected customers will receive a comprehensive transfer pack in May including full details of the proposed transfer process, which is expected to be complete by late July or August subject to necessary approvals.

AMP Financial Services manager director New Zealand, Jack Regan, said the consolidated scheme would adopt the AXA style multi-manager investment approach to “enhance the overall fund performance”.

Following the merger, AMP has access to AMP Capital’s New Zealand Multi-Asset Group and a review of AMP’s funds is under way.

“After that review is complete in May, we’ll send our customers more information about the refreshed AMP KiwiSaver Scheme, and it is expected this will include advice on product enhancements, such as a revised investment approach and reduced fees,” Regan said.

From tomorrow the IRD will suspend the provisional allocation of default customers to the AXA KiwiSaver Scheme and the scheme will be closed to new customers.

AMP has more than 260,000 KiwiSaver Scheme customers across its two KiwiSaver Schemes and 18% of KiwiSaver funds under management.

“With our core focus on investment, our extensive network of professional qualified advisers, and the scale to invest in product and service development to meet the needs of customers, AMP is well positioned for ongoing leadership in KiwiSaver,” Regan said.

“We are focused on helping to educate our KiwiSaver customers, especially those in default options, to choose the investment options that best match their individual circumstances and risk appetite, and AMP is very active in that regard.”